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Why Companies Adopt Growth Strategies: The Good, the Bad, and the Ugly
"Why Companies Adopt Growth Strategies: The Good, the Bad, and the Ugly"
After asking top marketers to describe the nature of their growth strategies (see 8/6 post), The CMO Survey asked them to “Rate the top three reasons why your firm is pursuing this growth strategy.” I gave marketers the following options: (1) opportunity to leverage brands; (2) opportunity to leverage existing customer relationships; (3) threat of domestic competitors; (4) threat of foreign competitors; (5) pressure from price-sensitive customers; (6) pressure from the stock market; and (7) ambition of company leaders.
Here’s the good news. When I sum up the ratings across the three top spots, the most highly cited reason is the “opportunity to leverage existing customer relationships” (27.3%). This is the always a good reason to grow and usually one that companies can do rather effectively and efficiently. Companies best understand their existing customers and so extending offerings to cross-sell or asking the customer to help reach other customers like them usually works.